Washington carbon tax bill clears key fiscal committee

The state Senate Ways and Means Committee passed Senate Bill 6203 Thursday afternoon. The measure now awaits action by the full Senate.

If passed, Washington state would be the first in the nation to impose a direct tax on carbon emissions.

Voters in this state rejected a carbon tax initiative in 2016 - largely over disagreements on how the money would be spent. But the failure at the ballot hasn't deterred Gov. Jay Inslee and others from pushing another carbon pricing proposal.

"This is a powerful piece of legislation," Sen. Kevin Ranker, a Democrat from Orcas Island, said before Thursday's vote. He added that "this is a very modest approach, maybe too modest."

The bill would impose a new tax of $12 per metric ton of carbon emissions on the sale or use of fossil fuels such as gasoline and natural gas. That's lower than the $20 per ton originally proposed by Inslee, who has previously tried but failed to get a carbon measure passed.

The tax would begin in 2019 and in 2021 would increase $1.80 per ton each year until it hits $30 a ton - estimated to be in 2030. In the first two years, the tax is projected to raise $766 million and increase to about $988 million in the next biennium.

Half of the money raised would go toward energy projects that reduce greenhouse gas emissions. Twenty percent would address climate resilience through water-related, forest health, wildfire prevention and other natural resources projects. There's also assistance for low-income families and workers in the fossil-fuel industry as well as economic development in rural communities.

Bill sponsor Sen. Reuven Carlyle, a Seattle Democrat, said it's a modest investment that would achieve meaningful carbon reductions and help transition the state to a clean energy economy. He said revenues would be invested in thoughtful ways, including in clean energy, rural areas and natural resources.

Republican Senate Minority Leader Mark Schoesler, of Ritzville, called it an energy tax that will hurt working families. He said it exempts more than 60 businesses while leaving taxpayers on the hook for the rest.

Aviation fuel and fossil fuels used in agriculture are among those that would be exempt. The tax would be levied once at the first point of sale or use, but would likely be passed on to consumers. In 2020, the carbon tax would mean a 10 cent increase in gasoline prices, or nearly 4 percent higher than it otherwise would be, according to legislative analysts.

Sen. Bob Hasegawa, a Seattle Democrat, expressed concerns about the bill's impact on those who may be least able to afford it. But he said he would vote for the measure to keep it moving.

"This is the wrong thing to do," said Sen. Barbara Bailey, an Oak Harbor Republican, who also worried about people being able to pay for their light bills.

Lawmakers have been lukewarm about a carbon tax and it's unclear whether the measure can pass by the end of the 60-day legislative session that ends March 8.

If the Legislature doesn't act, a coalition of environmental, tribal and others have said they'll bring a carbon initiative to the ballot in November.